Retirement Planning: Already Retired?

Retirement Planning Doesn't End When You Retire. You've worked hard and now it's time to enjoy the benefits. But you may still have questions about your savings and spending or other to-do items on your planning list.

We're here to help. We want to help your hard work pay off for years, even decades, to come. So talk to your State Farm® agent about your retirement plan and the topics below to make sure you're still moving in the right direction.

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Review Your Income Sources

When you're retired, one of your goals should be to maximize and help protect your income sources so you can live comfortably and confidently.

You may consider leaving a portion of your investments in a higher-risk, or aggressive, allocation adjusted for a longer timeline. In addition, you might consider placing two to three years of expenses in a liquid account – such as an interest-bearing savings, checking or money market account – to help safeguard against market downturns. It may be worth a visit with your State Farm agent, who can review your asset allocation and help you re-determine your comfort with investment risk.

You also need to decide when you want to begin receiving Social Security benefits. You can start drawing benefits as early as age 62, but you'll receive more money each month if you wait until your U.S. government-deemed full retirement age. Your benefits will continue to increase until age 70.

If you haven't yet filed for benefits, you can easily estimate how much you can expect from Social Security. Knowing your approximate benefit amount is essential if you're planning to rely on it for retirement income. For more information, talk with your State Farm agent about our free Retirement Distribution Report.

Regardless of when you plan to begin drawing Social Security benefits, or what your full retirement age is, you must apply for Medicare three months before your 65th birthday to avoid delay in the start of your Medicare Part B coverage. Keep in mind that you may also need a supplement plan to cover the gaps where Medicare falls short, as well as a prescription drug plan. Contact your State Farm agent for information about how State Farm Medicare Supplement insurance helps pick up where Medicare leaves off.

How Much Money Should I Spend?

Now is the time to start enjoying your retirement, but you'll want to be careful not to withdraw too much money during the first few years of retirement. Even if you've saved the suggested 70 to 80 percent of your previous yearly income, you certainly don't want to overspend and risk running out of cash.

A 2010 study by the Employee Benefit Research Institute found that 41 percent of Americans in the lowest pre-retirement income level will run short of money after 10 years of retirement. After 20 years, 29 percent of people in the second-highest income level will run out, as will 13 percent in the highest income level.

You don't want to make that mistake!

Fortunately, you may be eligible for a free Retirement Distribution Report with the help of your State Farm agent. Once we've entered your projected retirement savings and spending needs, your State Farm agent, with the support of an experienced team of professionals, will consolidate all your information and generate a Retirement Distribution Report. This report will help highlight common potential financial problems and provide steps to take that may assist you in reaching your goals. To get started, contact your State Farm agent.

Find Other Income Sources

Retirement can be expensive. These days, more and more retirees are seeking jobs, either because they need the money to make ends meet or miss the structure a job provides. You may want to consider consulting or finding a part-time position in a new field to generate additional income.

If you start collecting Social Security early, your benefits will be reduced $1 for every $2 you earn over the current earning limit until you reach your full retirement age. Fortunately though, once you reach that age, your benefits are recalculated, taking into account the months that benefits were withheld. Then you can work as much as you want, with no earning limits.

Annuities are another potential income source. An annuity is a contract offered by an insurance company, which makes a series of payments to you in exchange for a single premium or series of premiums. These payments can continue for a specific period of time (in years) or a defined length of time, such as your lifetime. Deferred annuities begin at a set time in the future and help you accumulate money for future use. There are also immediate annuities you can purchase for a lump sum and then begin receiving payments right away.

Keep Planning

Your future doesn't end at retirement. Estate planning will help ensure you've protected your family's interests as well as your own.

An estate plan involves the creation, conservation, and distribution of your assets. Your estate plan may be a last will and testament, or it might also include life insurance, trusts, business continuation plans or charitable arrangements. Regardless, you should consider creating an estate plan that pays estate expenses (including federal estate tax), provides your family members with income after you're gone, and distributes your assets to family members and other heirs with the least amount of loss possible.

Estate planning is an ongoing process. Review your estate planning documents once a year, or when life changes necessitate it. Remove outdated and irrelevant documents as you go to avoid confusion.

Relax And Enjoy

You've earned your retirement through years of hard work and savings. Enjoy this time in your life and remember there are many more good times ahead. We look forward to working with you and helping you get there.

Disclosure

Neither State Farm nor its agents provide tax, legal or investment advice. Customers should consult their own legal, tax, or investment advisors regarding their specific circumstances.